India said the Green Climate Fund (GCF) must be directed towards cleaner technology for developing nations, at the second meeting of the Business Dialogue for the upcoming UNFCCC COP-21 conference. Prakash Javadekar, the Union minister for environment, forests and climate change, has noted in the past that transfer of the $100 billion fund to poorer countries being asked to reduce their carbon footprint along with the rest of the developed world, would be crucial towards determining the success of the Paris meet.
Javadekar reiterates the view that supporting green credit through said fund is the way forward and not the Carbon Credit Mechanism. The latter focuses on emission cuts, and allows industries to pay for emissions instead of actually reducing their contribution to pollution. This is because a carbon credit is a purchasable certificate for the right to emit a certain amount of carbon dioxide or greenhouse gas.
The aforesaid Clean Development Mechanism (CDM) does not deter wealthy entities and nations from exacerbating climate change if they can afford to throw money at the pollution they’re causing. Javadekar says clean energy generation must be rewarded with due credit and funding support. Industries should invest in R&D as part of their business plan even in the face of an uncertain future.
Companies can reap huge amounts of profits from creation of cleaner tech. Javadekar proposes that part of the climate fund be used to subsidize such crucial eco-friendly technologies for developing nations. Though it was a success until 2012, the CDM is troubled by pricing as well as demand-supply mismatch. Its benefits have mostly been restricted to Least Developed Countries too.
Hence the carbon credit market is highly unstable at present. Since all countries are compulsorily required to state their Intended Nationally Determined Contributions (INDCs) for combating climate change at the Paris conference, Javadekar feels there’s much to be said for investing in cleaner tech. And a part of the green fund can partially pay for its implementation in poorer regions.